Loss-making THAI moves ahead with turnaround plan
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Thai Airways International (THAI) has received government backing for its ‘Transformation Plan’, which aims to return the national carrier to profit following five consecutive quarterly losses.
The plan, which was presented by THAI’s recently-appointed president, Charamporn Jotikasthira, outlines six strategic areas in which THAI needs to improve, including fleet and route management, cost controls and organising its business portfolio into “core and non-core business units”. It will include route cuts and “human resource” aspects, which are reported to involve 5,000 job losses.
The first part of the three-phase plan will see the national carrier aim to reduce short-term losses by cutting non-profitable routes, as well as “enhancing effort[s] to boost revenue” on stronger routes.
The second stage addresses issues of “product, service and human resource[s]”, while the third stage, to be undertaken once the business is restructured, will aim to grow THAI’s business and ensure “long-term sustainable profitability”.
The company stated that by the end of the process, “THAI will remain a full-service airline”.
“The essence of the Transformation Plan encompasses identifying problems being faced by the company, developing strategic initiatives, establishing timeframe for achieving milestones, establishing key performance indicators, and enhancing cost control,” the company said in a statement.
THAI suffered a difficult 2014, as unrest in Bangkok and the subsequent military coup and martial law damped demand for travel. The carrier incurred five consecutive quarterly losses, and for the first nine months of 2014 suffered a loss of THB9.21 billion (US$282 million).
The Transformation Plan received official approval from the Thai government’s ‘Super Board’ on 26 January 2015, allowing THAI to proceed with the plan.
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